Ted Kennedy

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I conclude by pointing out, once again, that 64 percent of all students borrow through the Federal student loan programs to finance an education; 74 percent of full-time students work 25 hours a week or more while attending school, and nearly half of all these students work at levels that are likely to have a negative impact on their academic achievement and the overall quality of their education. There is tremendous pressure on students now. If we tolerate this and let the administration's program go forward, it will mean additional pressure on these young people, and in the long run a deficit to the quality of education in this country. I yield the remaining time to the Senator from Minnesota.

Mr. KENNEDY. Mr. President, how much time remains?

Mr. KENNEDY. The Senator has put his finger on it. This is a shell game. The moneys that effectively will be saved will be used for the tax break, the tax cut for the wealthiest individuals. It is wrong education policy. It is wrong national security policy. American families need lower tuition rates rather than higher loan interest rates. That is what the Democrats stand for, and it is intolerable--intolerable--that the Bush administration would go through this subterfuge. The last time we faced it was in 1981 with the addition of an origination fee. That was a fee on all loan programs. That means that a student has to pay an additional 3 percent on what they have to borrow. Now students not only have to pay for tuition and fees, but the federal government added a 3 percent fee of their own to those already high costs. This administration does not get it straight when it comes to educating the young people in this country. I thank the Senator.

Mr. KENNEDY. I see my friend and colleague from Massachusetts.

Mr. KENNEDY. One State alone; that is right.

Mr. KENNEDY. Mr. President, $1.3 billion. This is a shell game. They will use the $1.3 billion they will get from students for the tax break. And we are talking about 6 million students who would be facing higher interest rates over the next decade. In my own state last year 36,000 people consolidated their FFEL loans--with an average loan of $30,000. That means that a variable interest rate could cost as much as half a million dollars to students in Massachusetts.

Mr. KENNEDY. I certainly am. Nationwide, college tuition have increased 35 percent over the last 10 years. Today, the average student leaves college with $17,000 of debt. In my State, the average loan that was consolidated last year was $27,000. Under the administration's proposal, students will lose the opportunity to consolidate their loans at a fixed rate and that would cost the average student thousands of dollars as the interest rate goes up from year to year.

Mr. KENNEDY. I yield for a question.

Mr. KENNEDY. Do I have 10 minutes?

Mr. KENNEDY. I see the Senator from Washington.

Mr. KENNEDY. Mr. President, every weekend that any of us go home, the families we run into are talking about the cost of higher education. We know that cost is going up. But this administration has just made an unconscionable recommendation for low- and middle-income families--to deny them the opportunity to consolidate the loans they have now at a fixed interest rate. That possibility is there for small business, it is there for big business, and this administration wants to foreclose that opportunity for families and new college graduates across this nation. This is what it is going to mean for the average student loan borrower in America: It is going to mean an additional $3,000 in costs on a $10,000 student loan. At a difficult and challenging time when state budgets are cutting their aid to higher education, and tuition is on the rise, it is bad education policy, and it is not in our national interest. We should be doing everything in our power to make college more affordable. I see the Senator from Vermont. I yield to him.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I ask unanimous consent that we consider an increase in the minimum wage no later than June 15.

Mr. KENNEDY. Will the Senator yield?

Mr. KENNEDY. I think I made my case.

Mr. KENNEDY

Mr. KENNEDY. The Senator is quite correct. There is a very interesting statistic for those who enter medical school. 85 percent of medical students want to become general practitioners. They care about patients and want to be there on the front line treating the families of America. However, they end up borrowing so much to pay for their school costs that they need to enter specialization because of the salary differences at the very time we need more general practitioners. I draw the attention of my colleagues to the chart and what has happened with grants and loans. My colleagues remember the great debates held on providing greater access to higher education for all Americans, those national debates go back to 1960. President Kennedy believed the size of your pocketbook should not determine what university a student attends, only your qualifications should determine where you could attend school. Grants, some loans, work-study programs, summer employment should add up to the cost of your tuition and fees. All of those match together in an economic package so a student can successfully go to the school of their choice. I was in the Education Committee when Secretary Bennett said: Too bad. Those families can go where the loans will take them. That is our view of this Republican administration. That is the attitude. We do not want to limit opportunity. I know where that is in the Record. We have seen the buying power of grants fail to keep up with the costs of college. The neediest children are forced to take out loans. Now we find at a time when these young students and graduates are trying to take advantage of refinancing their loans, we are hearing the administration saying: No, we need another $1.3 billion for our tax program so we are going to force students to wait and see what the interest rate will be every year instead of locking in at a fixed rate. That is regrettable. I draw another chart to the attention of my colleagues. This is a women's issue. Education is one way that we can help women close the earnings gap. When you deny women the opportunities to continue education, you continue a perpetuation of the notable disparity taking place. Women, like their male counterparts, increase their earnings when they increase their education. Once you put the economic binds by effectively denying people the ability to discharge debt, this will work against women students. We see it already. We will see it even grow over the period of time.

Mr. KENNEDY. I am glad to yield.

Mr. KENNEDY. But the Republican response to that is these students are going to become lawyers and doctors so they will be able to afford it. Would not both my colleagues agree, we have a shortage of 2 million schoolteachers in this country? What we are talking about is schoolteachers. We are talking about social workers who we are trying to help. We are talking about those who would be childcare providers. We are talking about police officials and nurses. These are the ones who are entering low wage professions, trying to make it and to be responsible and pay off their debt. They are the ones who are going to find education virtually priced out.

Mr. KENNEDY. May I add one point? I would be interested in my friend's reaction to this. If someone is receiving a Pell grant, the average family income for a Pell grant student is $17,000. These are gifted, talented individuals who could qualify for any of our greatest universities. Their family income is under $17,000, and the Pell grant is available to them. Reading from the Public Interest Research Group's analysis, even worse off are the students who depend on the Pell grants to finance their education. This would cost the typical Pell grant borrower $3,100, almost a thousand dollars more because since they are lower income, they have to pay--at the start they are paying higher rates. So we are talking about students who are gifted and talented, who have every kind of asset except a large wallet or pocketbook, who have a great deal to contribute to our Nation, and whose family income is less than $17,000, people who are going ahead and working. Sixty-three percent of the students in this country now who are on scholarship work 25 hours a week or more. That is extraordinary. We wonder why the students are not talking about books and education; they are talking about their debts and their obligations. Well, I am wondering, if my two friends would not agree, when families of limited income, even though their children have the academic gifts and talents to go on to education, are going to be forced to say: No, count me out; I will just go on, wait on tables, I will park cars, because I am not going to put my family through that kind of indebtedness. That is the message that will go out with this proposal.

Mr. KENNEDY. The State PIRGs have completed an interesting study. It is an independent evaluation on higher education student loan debt. Their estimate on the cost to borrowers of switching from a fixed rate to a variable rate consolidation loan--this is their estimate, not mine--for an average graduate with $16,000 in college debt would have a $2,800 increase over the next 10 years and $6,300 if they chose to spread their payments over 20 years. If one has $16,000 they would pay an additional $2,800--the average loan is $29,000 in my State. Do you understand that? Mr. President, $16,000 is just about the national average loan. This is not my estimate, this is the estimate of the highly regarded and respected national group the Public Interest Research Group. I do not know how many people are consolidating loans in the State of Maryland and the State of Illinois, but I do not think that higher rates are what these families deserve. They deserve the best possible low interest rates. They are uncertain about their economic future. They are planning their life. They have every right to consolidate at the lowest interest rates, and now the administration is attempting to force them to pay the rate at the time that they originate their loans.

Mr. KENNEDY. The Senator is absolutely correct. It is a powerful, powerful argument. We are trying to make sure we are going to have a well-qualified teacher in every classroom. More and more young people who are entering teaching are saddled with enormous debt burden. As a national objective, have a well-qualified teacher in every classroom. How can these young professionals afford to pay off their loans when we know that too many teachers are underpaid. And the Senator quite rightly points out that will require tens of thousands, hundreds of thousands, of teachers to get certification and to go back to universities and colleges, community colleges, to get these certifications. This kind of activity is going to make it that much more expensive, that much more of a disincentive to go into teaching. That is enormously important and significant. I thank my colleague for bringing this critical fact to the floor. I see my friend from Rhode Island who has been such a leader in education, and follows a very proud tradition in his state. We give fair notice to the administration that we are going to do everything we possibly can legislatively do to make sure this does not take place. We want to keep as many low-cost options for borrowers as possible to make sure that more people are getting college degrees. We will have more to say about this in the very near future. I yield the floor and I suggest the absence of a quorum.

Mr. KENNEDY. I yield.

Mr. KENNEDY. Under the Clinton administration.

Mr. KENNEDY. Five point six percent.

Mr. KENNEDY. I will be glad to yield.

Mr. KENNEDY. I will be glad to yield.